Third Quarter 2008 Earnings Conference Call Third Quarter 2008 Earnings Conference Call 2 2 Forward-Looking Disclosure Forward-Looking Disclosure This information and other statements by the company contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management’s plans, strategies and objectives for future operation, and management’s expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “project,” “estimate” and similar expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company does update any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the company’s success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; and (v) the outcome of claims and litigation involving or affecting the company. Other important assumptions and factors that could cause actual results to differ materially from those in the forward- looking statements are specified in the company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the company’s website at: www.investors.csx.com.
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Third Quarter 2008Earnings Conference CallThird Quarter 2008Earnings Conference Call
This information and other statements by the company contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management’s plans, strategies and objectives for future operation, and management’s expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “project,” “estimate” and similar expressions.
Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company does update any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements.
Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the company’s success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; and (v) the outcome of claims and litigation involving or affecting the company.
Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the company’s website at: www.investors.csx.com.
Executive SummaryExecutive Summary
Michael WardChairman, President andChief Executive Officer
44
Third quarter overview . . . Third quarter overview . . .
Third Quarter EPS from Continuing Operations
$0.67
$0.94
2007 2008
Delivered record revenues, operating income and EPS
Revenues grow 18% on diverse business portfolio
Performance in safety and service remains strong
Operating margin improves 250 bps to record levels
40%Increase
Operations ReviewOperations Review
Tony IngramExecutive Vice PresidentChief Operating Officer
66
Leadership, discipline and executionLeadership, discipline and execution
Strong improvement in safety performance continues
Productivity initiatives are delivering results
Network is stable and service improvement will resume
SafetySafety
ProductivityProductivity
ServiceService
LeadershipLeadership
DisciplineDiscipline
ExecutionExecution
PerformanceExcellence
77
Network responded well following storm impacts Network responded well following storm impacts
Train operations on New Orleans line restored
Interchange reroutes with western roads were effective
Midwest operations back to normal following flooding
Service is stable and is expected to improve
Birmingham
Memphis
New Orleans
BNI, UNP, KCSReroutes
Area ImpactedArea Impacted
St Louis
NSC HaulageRights
Chicago
Louisville
Indianapolis
Area ImpactedArea Impacted
88
Helping lead one of the Nation’s safest industriesHelping lead one of the Nation’s safest industries